The Patent Office Has Rejected WatchGuard’s Request to Invalidate One of the Three Patents Asserted Against It and Digital Will Now Seek an Expedited Path to Trial

Digital Ally®, Inc. [NASDAQ DGLY] announced that the U.S. Patent Office has rejected the request of Enforcement Video, LLC (dba WatchGuard Video) to institute an inter partes review (IPR) on U.S. Patent No. 9,325,950 (the ‘950 Patent). The ‘950 Patent is asserted against WatchGuard in a patent infringement lawsuit pending in the U.S. District Court in Kansas.

The lawsuit also involves U.S. Patent Nos. 8,781,292 (the ‘292 Patent) and 9,253,452 (the ‘452 Patent), the same two patents asserted against Axon Enterprise, Inc. (Axon, formerly known as TASER International, Inc.).

Digital’s lawsuit against WatchGuard claims infringement of these three patents by WatchGuard’s VISTA WiFi® body camera and its 4RE® Digital HD Panoramic In-Car System. Digital Ally is seeking both damages and an injunction preventing the sale of these products.

WatchGuard previously had agreed to be bound by the Patent Office’s decisions on Axon’s IPRs relating to the ‘452 Patent and ‘292 Patent. The U.S. Patent Office has recently rejected three of Axon’s four petitions after it determined that Axon failed to demonstrate even a reasonable likelihood of invalidating the underlying patents in its IPR petitions, and therefore such IPR’s were dismissed.

The Patent Office’s decision on the ‘950 Patent yet again confirms the strength and validity of Digital Ally’s patents, which have now survived multiple attempts by both Axon and WatchGuard to invalidate them.

WatchGuard is now barred from filing any further IPRs on any of the three patents asserted against it meaning the practical availability of WatchGuard’s litigation defenses are now severely limited. The U.S. District Court stayed the litigation while the determination of these IPRs was pending. In light of the denials of these IPRs by the Patent Office, Digital now plans to seek to lift the stay in the WatchGuard litigation and will request an expedited schedule to trial.

“The validity of our patents has repeatedly been upheld despite an onslaught of attacks from both Axon and WatchGuard,” said Digital’s CEO, Stanton E. Ross. “This ruling is a wonderful testament to the work done by our employees at Digital and a confirmation of what we have been telling our shareholders about the litigation,” stated Ross. “In both the Axon and the WatchGuard litigation we will seek to move forward as quickly as possible. Our goal is to obtain a permanent injunction that will require the removal of these products and the infringing features from the market. If we are successful with obtaining an injunction, I would caution the customers of Axon and WatchGuard that we intend to pursue all available legal options for removing and/or de-activating unlicensed infringing features from existing products in the field,” concluded Ross.

Digital Ally, headquartered in Lenexa, KS, specializes in the design and manufacturing of the highest quality video recording equipment and video analytic software.

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